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June 23, 2014

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SURFACE & DOMESTIC TRANSPORTATION www.joc.com THE JOURNAL OF COMMERCE 55 By William B. Cassidy NEW CENTURY TRANSPORTATION is closing its doors after 14 years in the less-than- t r uckload business a nd ha s f iled for Chapter 7 bankruptcy liquidation after failing to secure funding to keep its trucks operating. The closure is the biggest to hit the trucking sector since the collapse of Arrow Trucking in 2009 and Jevic Transportation in 2008. Employees received mailed notices of an "expected permanent shutdown" from New Century CEO Terry Gilbert this month that included mention that the company's management had attempted to sell the company. The company on June 10 posted an "employee assis- tance" page on its website, but offered no information of a pending shutdown or bankruptcy fi ling. Word of the shutdown, however, spread rapidly through social media, and as copies of the notice were posted to the truckingboards.com web- site. Several logistics and trucking industry sources familiar with New Century con- fi rmed the shutdown and that it had tried to arrange a sale. Companies such as truck broker Rapid Express Freight in Monsey, New York, are handling shipper queries about how the loss of New Century will affect their business. "We here at Rapid Express Freight are sad to see New Century Transportation shut- ting down," the fi rm said on its website. "We want to assure our customers that we are having no disruption in service due to New Century Transportation shutting down." Other carriers reportedly are helping New Century complete delivery of freight within its system. The sudden collapse of New Century comes as freight volumes and rates are rising and shippers are working harder and longer to find trucks. Truckload car- riers and third-party logistics companies repor t a t ightening ma rket , pa r t ia lly because of a shortage of qualified driv- ers, shippers advancing imports to avoid potential West Coast port labor disrup- tion and even a federal truck inspection ca mpa ig n t his mont h t hat repor tedly kept some carriers off the roads. New Century had a fl eet of 916 tractor- trailers and 910 drivers, according to the latest company information fi led with the Federal Motor Carrier Safety Adminis- tration. The Internet is swarming with companies trying to hire those drivers. Competing motor carriers are soliciting drivers directly on New Century's Facebook page. New Century fi led for Chapter 7 bank- ruptcy liquidation from its creditors on June 11. The notice to employees stated "the unforeseeable need to shut down operations" arose when an unnamed lender "unexpectedly declined" to fund ongoing operations. "NCT immediately took steps to seek financing and other alternatives, including a sale of all or part of the com- pany," it said. Those efforts had been unsuccessful, and employees were told they would be let go. "NCT reasonably believes that it could not have provided earlier advance notice of the shutdown because such advance notice would have precluded NCT's ability to secure alternative funding or a sale of the company," the notice said. Because "the situ- ation is currently in fl ux," some employees might be retained for some time by a Chap- ter 7 trustee, it said. The sudden collapse of New Century will create opportunities for other LTL carriers, especially those in the Northeast, and headaches for shippers that relied on its unique load-to-deliver LTL and truckload services. "New Century is the type of carrier that when they went into an account, they owned an account," said Ed Burns, president of Burns Logistics Solutions, a transporta- tion sales agent in Mohrsville, Pennsylvania. Privately owned New Century was the 24th-largest LTL carrier in 2013, with about $145 million in LTL truck- ing revenue, according to SJ Consulting Group. The com- pany was founded in 2000 by Harry Muhlschlegel, who pioneered the load-to-deliver model at Jevic Transporta- tion, which shut down in 2008. Muhlschlegel sold Jevic to Yellow Corp. in 1999 and then started New Century. He retired in 2012. That "load-to-deliver" model, which eschews traditional LTL hub-and-spoke terminal networks and thrives on heavier- weig ht pa r t ia l t r uck load sh ipment s delivered directly to consignees, is becom- ing more difficult to maintain in today's trucking marketplace, said Satish Jindel, president of SJ Consulting. "It was a neat concept that worked for many years for Muhlschlegel, but it's appli- cable to a limited, niche kind of shipment," he said. "In the kind of market we are in now, it's challenging for anyone trying to follow this model. They'll have to be extra cautious about how they operate." JOC Contact William B. Cassidy at wcassidy@joc.com and follow him on Twitter: @wbcassidy _joc. NEW CENTURY TURNS OUT THE LIGHTS After failing to secure funding or a buyer, the 14-year-old LTL carrier becomes the biggest trucking casualty in 5 years Competing motor carriers are soliciting drivers directly on New Century's Facebook page.

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